What I’m telling you is that normal people would not be doing that. Not in the way that this kind of idea makes it sound like anyway.
Everyone bitches when the price of milk goes up 8%, but nobody seems to realize that it went up because wages did. On average, if you're a worker, and you aren't saving (or trying to save) a pile of cash, inflation is net-zero for you.
[1] Stimulus checks did steer the behavior of normal people, but they were fiscal, not monetary policy. They had knock-on monetary policy effects, but the juice was worth the squeeze - thanks to them and the PPP, the economy didn't entirely collapse.
But people should be able to save. So that they can buy a house or apartment for themselves and their family. Without having to take up a loan to do so.
If everyone saves, the economy will collapse. Every dollar you save is a dollar that someone else doesn't earn.
In an inflationary environment, people can still save by buying equities.
This has tax and timing implications... But it's still possible.
> Without having to take up a loan to do so.
The existence of 25, 30, 35 year mortgages driving housing prices into the stratosphere is a separate problem, but not one you're ever going to unwind without having existing mortgage holders stringing you up from a lamp post.
That's a completely separate issue to inflation.
Where is the plan to make billionaires spend all their savings? That’s the money I personally didn’t earn!
Or is it saving for them, nothing for me?
In other words, we're looking at someone with a few hundred thousand dollars, held for a few years. At which point, what's stopping them from keeping the money in an index fund, instead of under the proverbial mattress?
Also, taking a mortgage is a totally normal thing to do when buying a house, it will give you years of enjoying your home ownership, and in this case inflation actually works for you!
Risk of principal loss.
Doesn't that result in scarcity and thus rising prices? A bit of a contradiction.
What do you think inflation is? It's a reduction in the value of money, relative to goods. You can't say that the solution to the problems of deflation is inflation. (I mean, you can, that is my whole point... but it fully undermines the original argument.)
In such an environment, businesses undergo brutal competition for a shrinking pool of money. Simply servicing current debts and operating expenses becomes difficult. Taking out new loans and/or investing capital into such businesses is nothing short of insanity. Even if a business could raise prices the inability of consumers to pay could easily result in a net loss.
The economy is built on the velocity of money. There's a reason why Bush called on Americans to spend money in the aftermath of 9/11, the system really can't cope with a significant slowdown in spending, even if only for a few days.